Construction Law/Notica for Claims
QUESTION: Dear Sir
Under any type of FIDIC Contracts, The notice for Claim raised by Contractor should be separate for each case of Claim?
In weekly and monthly Reports the contractor used to add a paragraph named "areas of concern" as required by him in the Contract, he always state under this paragraph that he suffers from Delays because of Bla Bla Bla ... Is this considered a notice for Claims? Or I am a Contract administrator working for the Client should receive a claim notice as stated under the clause of Claims?
ANSWER: Dear Mr. Khaled,
Thank you for your question and I like to clarify my views as follows.
Notice is initially required from the contractor “describing the event or circumstances giving rise to the claim”. The important time-bar provision is that the notice must be given “as soon as
practicable” and then more particularly “not later than 28 days after the Contractor became aware, or should have become aware” of the particular event or circumstance in most cases. If the contractor fails to give notice within the 28-day period the Time for Completion “shall not” be extended, and no additional payment shall be made. The provision for claim or claims has been made in FIDIC contracts as separate submission as the event for each delay is different and at different occasions and as such this notice can not be grouped under one submission of weekly or monthly report to serve the required purpose. This is true even for minutes of meeting issued and mentions requests or otherwise on issues relating to time extension. The timely receipt of notice by the Employer side is important as it gives sufficient notice in advance to the Engineer to take remedial measures to reduce the time impact if possible and hence provided in the contract as a condition precedent and needs to be followed in letter and spirit.
I hope I have answered the question and if not please come back with specific query you still have unattended.
---------- FOLLOW-UP ----------
QUESTION: Dear Mr. Liaqat
Thank you so much however, I still have more question please;
I received a claim from Contractor claiming for Extension of Time & Cost of his Standby Crew through a period of time in which his work was interrupted due to reasons attributable to the Employer. The interruption he suffered was broken down into 20 cases of work stops within the last 2 months. His attached supporting documents were Notice letters in some cases and daily construction report in other cases. Please note that each Notice letter & daily reports was submitted timely upon the occurrence of the event in which he has highlighted that his work has been stopped due to bla bla bla and the details of the standby crew are 3 welders, 5 pipe fitters, 2 excavators , etc without giving any figures in those Notice letters or daily reports of the number of days or amount of money he claims for, as he did in the cumulative Claim submitted lately. My question is; are daily reports will be considered as supporting documents for such claims although I didn't receive them timely as a Contract Administrator? how can I approve the number of days of delay that he is claiming now since i have only the Notice letter when he stopped working and meanwhile i don't have evidence when he resumed the work again. Please take into account that the interruption every time was always verified by our team on site but no records with them when he resumed the work again .. I a sorry for the prolongation and please advise ASAP .. Thank you Sir
Dear Mr. Khaled,
Thank you for coming back.
With the provided information, i can only give a general response regarding notice requirements and use of minutes of meetings and daily reports etc as substitute and provide my comments as follows.
1. If a contractor fails to serve a proper claim notice, this will not result a loss of rights to an extension of time claim unless the contract specifically states that the service of a notice is a condition precedent to such rights. The concept seems reasonable. Owners should be entitled to know about potentially costly issues as they develop so that they can deal with them up front before they become more costly or problematic. But the effect on contractors can be devastating. For instance, a contractor could leave hundreds of thousands of Rupees of legitimate extra costs on the table simply because it verbally advised its Employer of the issue and the associated cost on site but never in writing. While some courts or arbitrators may overlook a contractor’s less formal compliance with contractual notice provisions and allow them to proceed with a claim, others will be unsympathetic to the contractor’s view point. So it is essential to read and understand all of the notice provisions in the contract (in many instances, there will be a multistep process that begins with general written notice and includes following up with a formal written change request or alternative dispute resolution). I am therefore of the opinion that notice must be served in the proper format and sequence prescribed in the contract. The purpose of daily progress report, monthly report or for that matter minutes of meetings is different and can not be considered substitute for the prescribed notices unless specifically mentioned or can be inferred so from the wording of the contract.
2. Now coming to your specific scenario, i agree with your view point that daily reports are only supporting document to actual facts and situations that may become reason for time extension. This view is supported by some court cases in U.K etc. and if both sides wants to have a change in this procedure, the only apparent way is to go for an amendment to the contract.